Masked men break into Ukraine’s national gas company office

Kiev, March 4 (DPA) Masked men believed to be government agents broke into the headquarters of Ukraine national natural gas company Naftogaz Ukrainy Wednesday and are searching the premises, witnesses said. The men were armed and wore camouflage uniforms commonly used by Ukrainian special force police and military units.

The assault teams were moving through Naftogaz offices, the witnesses said.

The entire senior board of Naftogaz had been placed under arrest, according to an unconfirmed Interfax report.

The incident came only hours after Ukraine’s secret police, the SBU, arrested a senior tax administration official for allowing some 13.7 billion cubic metres of natural gas of disputed title and held in Ukrainian reservoirs and pipelines, to be marketed in Ukraine.

The SBU was in the process of investigating a suspected secret agreement between Naftogaz officials and Ukrainian industry managers to sell the gas worth some $3.9 billion, according to a morning SBU statement.

Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko are locked in a bitter battle for control of the country’s natural gas reserves. They have accused each other of attempting to use the massive cash stream generated by natural gas sales to advance their political careers.

Control of natural gas is critical to political power in Ukraine, as the government subsidises low prices, creating shortages and allowing politically well-connected industrial tycoons to produce goods at cheaper than market cost.

Conflict between Yushchenko and Tymoshenko over Ukraine’s natural gas priorities sparked an two-week energy crisis in Europe in early January, after Russia cut off supplies to Ukraine after months of failing to reach a 2009 contract agreement with the Yushchenko-Tymoshenko government.